- On 2 July, the Commission issued recommendations for EU Member States to adopt tax incentives to accelerate the Clean Industrial Transition. The guidance highlights two main types of tax incentives.
- Accelerated Depreciation (up to Immediate Expensing): this allows companies to deduct the full cost of eligible clean technology investments—such as renewable energy systems or energy-efficient machinery—more quickly, sometimes even in the year of purchase. This reduces upfront tax liabilities and improves cash flow, making green investments more attractive.
- Targeted Tax Credits: these directly reduce corporate tax liabilities for investments in strategic sectors like clean technology manufacturing and industrial decarbonisation. Where possible, Member States are encouraged to make these credits refundable or allow them to be offset against other national taxes, further incentivising investment.
- Timing: the Commission has invited Member States to notify it by 31 December 2025 of any measures they introduce or announce to implement these recommendations, as well as of any similar measures already in place. The Commission will monitor national implementation and the effectiveness of these tax incentives in driving clean investment, ensuring alignment with the Clean Industrial State Aid Framework.
Resources (click to open)
